Oil rises on hopes for deeper OPEC output cuts, US-China trade talks

OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day. (AFP)
Updated 11 October 2019

Oil rises on hopes for deeper OPEC output cuts, US-China trade talks

  • OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day
  • Top US and Chinese negotiators wrapped up the first of two days of scheduled trade talks on Thursday

SEOUL: Oil prices climbed early on Friday, building on gains in the previous session, after producer club OPEC hinted at making deeper cuts in supply while optimism was revived over talks between the United States and China to end their trade war.
International benchmark Brent crude futures were at $59.26 a barrel by 0251 GMT, up 16 cents, or 0.3 percent, from their previous settlement. Brent settled up 1.3 percent at $59.10 a barrel on Thursday.
US West Texas Intermediate (WTI) crude futures rose 16 cents, also up 0.3 percent, from their last close to $53.71 per barrel. In the previous session, WTI settled 1.8 percent higher at $53.55 a barrel.
On Thursday Mohammad Barkindo, Secretary-General of the Organization of the Petroleum Exporting Countries (OPEC), said all options were on the table, including a deeper supply cut to balance oil markets. A decision would be taken at a December meeting between the OPEC and its partners, he said.
OPEC lowered its 2019 global oil demand growth forecast to 0.98 million barrels per day (bpd), while leaving its 2020 demand growth estimate unchanged at 1.08 million bpd, according to OPEC’s monthly report.
Beyond OPEC, trade talks between the United States and China also remained on the market’s radar as the world’s top two economies seek to resolve a more-than-a-year-long trade row that has slowed global economic growth and curbed fuel consumption.
“Oil bought into the upbeat tone from the bilateral talks as well, for better or for worse, and was also boosted by fighting talk on prices by the OPEC secretary-general,” said Jeffrey Halley, a senior market analyst at OANDA in Singapore.
Top US and Chinese negotiators wrapped up the first of two days of scheduled trade talks on Thursday, with business groups expressing optimism that the two sides might be able to ease tensions and delay a US tariff hike set for next week.
“The United States is the largest global consumer of oil while China, the biggest driver of year-on-year oil demand growth,” said Stephen Innes, Asia Pacific market strategist at AxiTrader.
“The most significant sentiment driver hinges on the outcome of the trade talks which, if (they) end on a positive note, could go a long way to begin to repair the economic damage done ... these economic powerhouses would need more oil,” said Innes.


Walmart’s Flipkart to spin off digital payments business

Updated 03 December 2020

Walmart’s Flipkart to spin off digital payments business

  • Flipkart will continue to be PhonePe’s majority shareholder
  • India’s digital payments market expected to more than double in size to $135 billion in 2023

NEW DELHI: Walmart-controlled Indian e-commerce firm Flipkart said on Thursday it was partially spinning off PhonePe to widen the digital payments platform’s access to capital to fuel its growth.
PhonePe, which competes with Alibaba-backed home-grown payments pioneer Paytm and Google Pay, will raise $700 million in primary capital, Bengaluru-based Flipkart said in a statement.
The money will be raised from existing Flipkart investors led by Walmart, giving PhonePe a valuation of $5.5 billion including the fundraising, the statement said.
Flipkart will continue to be PhonePe’s majority shareholder, it added.
“We are really excited to have access to dedicated long-term capital to further our ambitions in the financial services distribution sector as well as creating large innovative growth platforms for India’s micro, small and medium enterprises,” PhonePe CEO Sameer Nigam said.
PhonePe is eyeing profitability by 2022 and a public listing the following year, Nigam has previously said.
The fintech firm has more than 100 million monthly active users which helped it clock nearly one billion digital payment transactions in October.
India’s digital payments market, expected to more than double in size to $135 billion in 2023 from 2019 levels, has also attracted the likes of Amazon.com and Facebook, which have come up with their own systems to woo users.
That rapid growth in fintech has driven India’s flagship payments processor, the National Payments Corp. of India (NPCI), to cap the share of digital transactions some companies can account for.
The NPCI’s move, announced last month, is expected to hinder the growth of payments services offered by Facebook, Google and PhonePe, while boosting the likes of Reliance’s Jio Payments Bank and Paytm, which have niche bank licenses.